Suitable for: Anyone who works as an employee
Tax Difficulty: Easy
Time to read: 6-8 minutes
Tax Focus: Income Tax Returns
The ATO’s mission for the 2018/2019 tax year is to crack down on the $8.7 billion dollar “tax gap”. One of the main focus points of this crackdown is the claiming of work-related clothing and dry-cleaning expenses, where certain taxpayers who seem to be overclaiming will receive “please explain” letters from the ATO.
It’s really important you’re aware of exactly the types of expenses you can claim on your tax return, and how you are expected to substantiate your claims. In this Help Centre article, we’ll take a look at the clothing and dry-cleaning expense category in detail and help you correctly record it on your tax return.
“If you can’t substantiate it, you can't claim it!” - ATO, 2019
What sort of clothing, laundry and dry-cleaning expenses can I claim on my tax return?
You can claim occupation-specific clothing expenses when the clothing in question is:
- Isn’t everyday in nature, and
- Allows the public to easily recognise your occupation.
Jake is a chef and is wondering whether he is able to claim the cost of his checked pants that he just bought himself.
The pants are occupation specific, as they are part of a chef’s uniform. Jake also wouldn’t reasonably expect to wear these checked pants as part of his day-to-day attire, and they’re easily identifiable as being pants that a chef would wear in a kitchen.
Given the pants meet all the necessary criteria, the purchase and cleaning expenses are claimable on Jake’s income tax return.
Jesse is a bartender and has bought a new pair of black pants and a plain white shirt to meet the dress code for staff at the bar she works at.
These items of clothing are not occupation specific, so they do not satisfy the first criterion. Whilst Jesse may be able to argue that she personally would never be seen alive wearing black pants or a white shirt in public, the items would still not be deemed occupation-specific and are therefore not claimable on her income tax return.
Rob has just started a new job at a consultancy firm and is required to wear a suit at work. Is the suit itself, and the cost to clean the suit, claimable on the tax return?
No. The suit is not deemed to be specific to Rob’s occupation, as it could be acceptably worn in a number of other situations if Rob wished to. Whilst Rob may personally never wear the suit outside of work situations, this fact doesn’t make a difference to the determination.
In the context of the income tax return, for protective clothing to be claimable, it needs to provide a degree of protection against the risk of injury and illness at work. This includes, but is not limited to, clothing that:
- Is made to cope with more rigorous conditions
- Is designed to protect you. e.g. heavy duty or padded pants
- Has a density of weave which gives an added UV rating, where your job requires you to work outdoors.
Some examples of such items include:
- Fire-resistant, and sun-protection clothing
- Safety-coloured vests
- Non-slip nurses shoes
- Rubber boots for concreters
- Steel-capped boots, gloves, and heavy-duty shirts and trousers
- Overalls, smocks or aprons you wear to avoid damaging your ordinary clothes during your income-earning activities.
You can’t claim the cost of purchasing or cleaning normal clothes or footwear that you choose to wear at work and may also protect you. For example, regular shoes are not claimable even though you wear them at work to protect your feet.
Work uniforms are claimable when they are unique to the organisation you work for. This would typically involve the employer’s logo being permanently attached to the clothing, and the clothing not being made available to the public.
Cleaning of work clothing:
You can claim the cost of washing, drying and ironing eligible work-specific clothes, or having them dry-cleaned.
You need to have written evidence of your expense claims, if:
- The amount of your claim is greater than $150, and
- The amount of your total claim for work-related expenses exceeds $300 - not including car, meal allowance, and other travel expenses.
If you aren’t required to keep written evidence, you can estimate your claim on a reasonable basis:
- $1 per load, if the load is made up of only work-related clothing
- 50c per load if there are other items included.
How to I account for this expense on the Airtax tax return?
When you arrive at the “Clothing & Dry Cleaning” expense section on the Deductions page, you will notice a drop-down that allows you to categorise the type of clothing expense you wish to claim. You can then list the dollar-value attributable to this clothing expense. If you need to add more than one type of clothing expense, there is also an option for you to add further categories.
What you’ve learned:
- The different types of work-related uniform
- The difference between occupation-specific, and everyday clothing
- How to record these expense amounts on the Airtax tax return.